BTC weekly rise exceeds 10%, nearly 7 billion USD long term funds get on board

This week, the opening price of Bitcoin was $85177.33, and the closing price was $93780.57, with a weekly rise of 10.10% and a volatility of 12.73%, achieving three consecutive weeks of rebound, along with an increase in trading volume. On Monday, it surged strongly, breaking through the 120-day moving average, and thereafter, it remained above the moving average for the entire week, indicating a strong willingness to go long.

The U.S. government continues to release signals that negotiations are progressing well, but the other side's attitude is vague, indicating that the outcome of the negotiations is unclear. Trump has clearly stated that he will not dismiss Powell, which has alleviated market concerns about the independence of the Federal Reserve, leading to a stabilization and rebound in the stock, bond, and currency markets.

The Federal Reserve has released positive signals to the outside world. Cleveland Fed President and 2026 FOMC voting member Loretta Mester stated that the Fed is capable of taking swift action once circumstances change. Fed Governor Christopher Waller also pointed out that if the job market deteriorates significantly, it could prompt the Fed to accelerate and increase rate cuts.

Recently, the performance of global markets, especially the U.S. financial markets, has fully reflected the irrationality and randomness of trade frictions, as well as their huge impact on the world economic system. The U.S. government and the Federal Reserve's compromise attitude towards the "three kills" of the stock market, bond market, and foreign exchange market confirms the view that "politics, economy, and markets primarily operate along rational paths in the medium to long term."

However, it should be noted that the market rebound has only temporarily alleviated concerns about a potential market crash and economic recession caused by trade frictions. The future trend of the market will depend on whether the trade disputes can be resolved in a timely manner and whether the U.S. economy is truly entering a recession. Based on this judgment, the ongoing disclosure of the first quarter earnings reports of U.S. stocks is particularly important.

Policies, Macroeconomic Finance and Economic Data

Senior officials of the U.S. government stated that trade negotiations are making good progress, particularly the talks with China are also actively underway. However, the Chinese government directly pointed out that the two sides have not engaged in negotiations.

The countries currently engaged in negotiations include Japan and South Korea, and the probability of these two countries reaching terms favorable to the United States is very high, and their "concessions" will also set an example for other countries.

However, there are no signs that the difficult US-China negotiations have entered a substantive consultation phase. Therefore, the second stage of trade friction has just begun, and there is still a certain distance from achieving significant progress. This determines that the time and space for the market rebound are limited, and it is difficult to be optimistic in the short term.

Powell's remarks this week focused on the inflation and economic uncertainty brought about by trade policies, setting the tone for the upcoming May interest rate meeting and reaffirming the independence of the Federal Reserve. He insisted on a data-driven approach to policy, maintaining a stable interest rate stance. He will not yield to political pressure to cut rates but hinted that if there are significant changes in inflation or employment data, policy adjustments may be made. Other Federal Reserve officials' comments emphasized a more "dovish" stance, indicating the possibility of a rate cut in June.

As of the weekend, the CME FedWatch tool shows a 62.7% probability of a rate cut in June. With the market rebound, this probability has seen a significant decline compared to the past two weeks.

The Federal Reserve's Beige Book released on April 23 shows that 8 out of 12 Federal Reserve districts reported "little noticeable change" in economic activity, indicating a slowdown in overall economic growth. Only a few districts reported slight growth, while some reflected a deteriorating economic outlook. Businesses reacted strongly to tariff policies, with several districts raising their inflation expectations for 2025 to 3.5%. Manufacturing activity further contracted, with the manufacturing PMI dropping to 48.5. Consumer spending grew moderately, but high prices and tariff expectations began to undermine consumer confidence. Retailers reported inventory backlogs, particularly of imported goods, with sales growth falling short of expectations. Employment levels remained generally stable, but hiring activity weakened, with some districts reporting increased layoffs, especially in retail and manufacturing. Wage growth slowed but remained above pre-pandemic levels, and labor shortages continued in the tech industry and high-skilled positions.

The content of the Beige Book is one of the focuses of the Federal Reserve. Its contents indicate that the negative effects of tariffs are becoming evident, but the extent is still unclear.

With the dovish statements from the government and the Federal Reserve, the market's extreme panic sentiment has eased. The US Dollar Index rebounded to 99.613 after falling to 97.991. The 2-year Treasury yield dropped by 1.42% to close at 3.7560%, while the 10-year Treasury yield fell by 2% to the neutral zone of 4.245%. Risk markets performed even better, with the Nasdaq, S&P 500, and Dow Jones achieving weekly rebounds of 6.73%, 4.59%, and 2.48%, respectively.

Gold peaked at 3499.93 USD/oz at the beginning of the week but then fell sharply, turning to a decline during the week.

Selling Pressure and Sell-off

As the price rebounded significantly, on-chain selling increased this week, mainly from short-term holders. The total on-chain selling for the week rose to 197040.26 coins, with short-term holders accounting for 190568.61 coins and long-term holders for 6471.65 coins. The net outflow from exchanges surged to 62696.12 coins, marking the largest net outflow week since this period. This outflow alleviated market selling pressure on one hand, while on the other hand, it indicated a strong market enthusiasm for getting on board.

Long term holders increased their positions by over 120,000 this week, while another noteworthy group of bullish investors is the cluster of addresses holding between 100 to 1,000 BTC, which saw an increase of nearly 30,000 coins in a single week.

Capital In and Out

With the Federal Reserve and the government's attitude returning to rationality, this week the inflow of funds into stablecoins and ETF channels has been significant, totaling nearly $7 billion.

In 7 trading days, there were net inflows on 6 trading days, indicating that long term funds are very actively getting on board. However, it is important to note that as the price of Bitcoin rebounds to around $95,000, and with trade frictions and concerns about economic recession still present, along with the most optimistic interest rate cut expectations being a month away, market divergences still exist, and short-term fluctuations are inevitable.

Cycle Indicator

According to eMerge Engine, the EMC BTC Cycle Metrics indicator is 0.50, indicating that the market is in a rise continuation phase.